"retirement component"
means a component established in terms of the rules of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund for a person who is a member of that fund, if the rules of the fund provide that—
| (a) | two-thirds of the total retirement contributions to a pension fund, provident fund or retirement annuity fund by or on behalf of that member on or after 1 September 2024 are allocated to this component: Provided that— |
| (i) | in determining the value of the contributions to this component an amount of charges and risk premiums deductible against such contributions must not be taken into account; |
| (ii) | in the case of funds with a defined benefit funding structure, the total value attributed to this component on or after 1 September 2024 is to be determined with reference to two-thirds of the member’s ‘pensionable service’ as contemplated in the rules of that fund on or after 1 September 2024; and |
| (iii) | a fund with a defined benefit structure that is unable to allocate contributions as contemplated in paragraph (ii) may allocate contributions utilising a reasonable method of allocation as approved by the Financial Sector Conduct Authority; |
| (c) | any amounts transferred from a retirement component of any other pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund on or after 1 September 2024 are allocated to this component; and |
| (d) | the total value of the member’s interest in the retirement component must be paid in the form of an annuity (including a living annuity), a combination of annuities (including a combination of methods of paying the annuity) or a combination of types of annuities except where the total member’s interest in the retirement component calculated together with two-thirds of the total member’s interest in the vested component does not exceed R165 000, where the member is deceased or where the member elects to transfer the retirement interest to a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund: |
Provided that this definition shall not apply to—
| (i) | a ‘beneficiary fund’, ‘pensioner’ or a member to whom an ‘unclaimed benefit’ as defined in section 1 of the Pension Funds Act is due as at 31 August 2024, a fund where a liquidator has been appointed in terms of the Pension Funds Act before 31 August 2024, and a fund with no member assets immediately before 1 September 2024; |
| (ii) | a legacy retirement annuity policy; or |
| (iii) | any person who is or was a member of a provident fund or provident preservation fund and who was 55 years of age or older on 1 March 2021 and is still a member of the same provident fund or provident preservation fund, unless such person has elected to contribute to this component within 12 months of 1 September 2024; |
[Definition substituted by section 1(1)(zE) of the Revenue Laws Second Amendment Act 44 of 2024 N5738, GG51828, dated 24 December 2024 - comes into operation on 1 September 2024 (section 1(2))]